What the &#%$ is a CryptoKitty?

The most expensive CryptoKitty ever purchased sold for $110,707 to a willing buyer. People have spent over $24 million on CryptoKitties, and the project has received $12 million in venture capital funding. But what exactly is a CryptoKitty?

CryptoKitties is a “blockchain game.” It involves collecting, trading, and breeding CryptoKitties with “cattributes.” These kitties are actually tokens stored on a blockchain.

CryptoKitties Are a Digital Asset

Founder Cat #18 sold for 253.3368 Ether, which was worth $110,707 USD at the time.

CryptoKitties is a game built on top of the Ethereum blockchain and smart contracts. CryptoKitties is a decentralized application, or “DApp,” built on top of the Ethereum computing platform. This means that the application is run and the kitties are stored on a distributed network of computers running Ethereum nodes.

Because it’s based on Ethereum, CryptoKitties uses the Ether cryptocurrency token. Ether is an “altcoin,” which just means it’s a cryptocurrency that isn’t Bitcoin. Performing tasks like breeding CryptoKitties involves paying Ether tokens to the Ethereum network, compensating the people running those Ethereum nodes for their computing power. Ether is also used when buying and selling CryptoKitties.

A CryptoKitty itself isn’t a currency token, however. Instead, it’s a “digital asset” that’s stored on the Ethereum blockchain. Technically, each CryptoKitty is a unique ERC-721 token that’s stored on the Ethereum Blockchain.

Each CryptoKitty has a combination of “cattributes” that make it unique. These features come together to give each CryptoKitty a unique look. Some CryptoKitties have “mewtations,” which are rare cattributes. These CryptoKitties can be traded, sold, and purchased like any other digital asset. They can also be bred with another CryptoKitty to create a new kitty.

RELATED: What is Ethereum, and What Are Smart Contracts?

CryptoKitties Reproduce Through Smart Contracts

Here are the $110,707 cat’s children.

The first CryptoKitty—the “genesis cat“—was born on December 2, 2017. Since then, a new “generation 0” cat has been born every fifteen minutes. In November 2018, a year after the game launched in November 2017, the last “generation 0” cat will be born. All new kitties will be produced through breeding after that point.

You can “breed” two different CryptoKitties together to get a new CryptoKitty. CryptoKitties don’t have biological sexes, so any two CryptoKitties can function as a breeding pair if their owners agree. One CryptoKitty in the transaction is the “dame” and the other is the “sire.” The owners decide which cat is which. The owner of the “dame” CryptoKitty receives the new offspring kitten. Even if a CryptoKitty is a dame or sire in one breeding pair, it can have the opposite role in a future breeding pair.

This breeding process—and all CryptoKitties tasks, including trading CryptoKitties—takes place through Ethereum smart contracts. Because these contracts are run on the Ethereum blockchain, you must pay in Ether to perform them. That Ether payment provides the incentive for people operating Ethereum nodes to do the computing work and record your activities on the Ethereum blockchain.

Different kitties have different “cooldown” speeds, which affect how long they have to “rest” after breeding before they can breed again.

It’s All About the Blockchain

CryptoKitties uses the MetaMask browser extension, which can run Ethereum apps in your browser.

On the surface, CryptoKitties is just a game that involves collecting digital cat pictures, breeding them to make new cat pictures, and trading cat pictures. That could describe many games that exist on Facebook or your phone—so what?

The unique draw of CryptoKitties is the blockchain part. The cats are tokens stored on the Ethereum blockchain and the game itself is run through Ethereum smart contracts. This means that no company could take your kitty away from you. Your kitty isn’t stored on a company’s servers—it’s stored on the blockchain. And, since the game is made up of smart contracts, it could continue to exist even if the company behind CryptoKitties closed up shop. It’s a way of providing “ownership” of digital assets to individuals without relying on a centralized server that could also be a central point of failure.

Just as owning Bitcoin really involves a “wallet” that contains a private key allowing you to spend Bitcoin on the blockchain, owning a CryptoKitty involves a wallet that holds your private key for your CryptoKitty. In other words, your CryptoKitties are stored in a digital wallet, just as Ether and Bitcoin are.

RELATED: What Is a “Blockchain”?

Why Are People Spending So Much Money on CryptoKitties?

You might wonder why people are spending so much money on CryptoKitties. But people spend money on all kinds of things. Someone spent $54,970 on a rare Pokémon card in 2016, and people spend millions of dollars on art. Heck, one man spent over $2 million in the mobile game Modern War.

Everything is worth what someone is willing to pay for it, and some people are willing to pay a lot for CryptoKitties. As collectibles, they have rarity: each CryptoKitty is unique, and there will only ever be 50,000 “generation 0” CryptoKitties produced.

Because these collectible cats are stored on a blockchain, each user directly controls their CryptoKitties. Even if Axiom Zen, the company behind CryptoKitties, shut down, the company couldn’t take away the CryptoKitties or end the game. That likely makes some people feel more comfortable purchasing this type of cat.

And, let’s be honest: CryptoKitties is a blockchain app that uses a cryptocurrency. Big believers in the blockchain and cryptocurrency are likely drawn to it. That helps explain why CryptoKitties took off in December, 2017. That was the same month that Bitcoin hit its all-time high value, although Ether didn’t reach its all-time high value until mid-January, 2018.

How You Can Play CryptoKitties

These CryptoKitties can be yours for less than $2 each.

The easiest way to get started with CryptoKitties is to visit the CryptoKitties website. The “Start Meow” page takes you through installing the MetaMask browser extension, which functions as a secure wallet that contains your CryptoKitties.

Don’t forget your password or seed words. As with a Bitcoin wallet, if you forget the information, you won’t be able to unlock your wallet and you’ll lose all your CryptoKitties and Ether.

In the US, you can purchase Ether (ETH) directly in MetaMask and use it to pay for the game. If you’re outside the US, you can purchase Ether from an exchange like Coinbase in the same way you’d buy Bitcoin and send it to your MetaMask wallet.

You can then purchase a CryptoKitty at auction if you want to get started. Despite the high prices of some rare and in-demand CryptoKitties, there are many CryptoKitties available starting at 0.003 ETH, which converts to just $1.68 USD at the time of writing.

RELATED: How to Buy Bitcoin the Easy Way

No, We’re Not Recommending You Play CryptoKitties

Of course, we’re not recommending you take up collecting and trading CryptoKitties if you’re not interested in it. None of us here at How-To Geek play CryptoKitties—we don’t really see the point. We’re just trying to explain the craze.

Ultimately, CryptoKitties is about more than cat pictures. It’s one of the world’s first blockchain games, and it’s certainly the first big one. It’s also an example of using distributed Ethereum blockchain apps inside a web browser.

Many people believe blockchains will be widely used for digital assets in the future. If so, CryptoKitties is just one of the first examples.

Chris Hoffman is a technology writer and all-around computer geek. He's as at home using the Linux terminal as he is digging into the Windows registry. Connect with him on Twitter.